Govt Will Pay 24% Of Wages For Employees’ Provident Fund Till This Date: Full Details Here
Finance Minister Nirmala Sithraman has said that the Atmanirbhar Bharat Rojgar Yojana (ABRY) scheme will be extended to March 31, 2022..
About The Scheme
Under this scheme, the govt would provide subsidy for 2 years for new employees onboarded on or after 1st October, 2020 and upto 30th June, 2021.
This deadline has now been extended till March 31, 2022.
The scheme aims to support new employees and their employers with regards to contributions into the employee provident fund (EPF).
It also seeks to boost job creation in the formal sector and incentivise creation of new employment opportunities during the Covid recovery phase under Atmanirbhar Bharat Package 3.0.
There will be conditions under which the govt will contribute to one’s PF account
- Those who receive monthly wages of less than Rs 15,0000
- Not working in an establishment registered with Employees’ Provident Fund Organisation (EPFO) before 1st October, 2020
- Do not have a Universal Account Number or EPF Member account number prior to 1st October 2020
- Also includes those who lost their jobs after March 1, 2020 and landed jobs again after October 1, 2020.
Those with all the above conditions will be eligible for the benefit.
The govt will pay 12% employees’ and 12% employers’ contribution, that is 24% of wages, for companies with a maximum 1,000 employees towards EPF for new hires for 2 years.
In other words, if a fresher landed a job after June 30, they will receive higher in-hand salary now that the govt will pitch in to their EPF for 2 years
For those with more than 1,000 employees, the govt will pay only the employees’ share of EPF contribution- 12% of wages for new employees for 2 years.
Govt Incentivises Job Creation
With this move, the govt will reward companies with a lower total wage bill which have recruited new hires till the extended deadline.
Under the present mandate, the monthly contribution of the employee towards their EPF is 12% of wages including basic pay, dearness allowance and retaining allowance, if any.
EPFO will credit this amount, termed subsidy support, to the employee’s Aadhaar-seeded EPFO account electronically.
The beneficiary must ensure that their UAN is linked to Aadhaar.
Suggestions On How To Use Extra Money
Those who receive the subsidy and consequently an increase in their salary have been advised to direct it to one’s voluntary provident fund (VPF) to build savings for retirement.
Another fruitful use of the money is to invest in equity mutual funds through systematic investment plan (SIP) route.
One can also purchase health cover for their parents through monthly premium payment mode.